Picture: iSTOCK
Picture: iSTOCK

NEW YORK — Shares on major equity markets hit their highest in nearly two months on Wednesday and US government bond yields touched their highest in almost four weeks as strong US economic data tempered fears of a global economic slowdown.

Crude oil futures turned higher in mid-morning trading in New York despite a huge build-up in stockpiles.

European stocks rose, putting them on track for their longest winning streak in five months. Wall Street opened lower, but was little changed with the S&P 500 not far from an eight-week high hit Tuesday.

The latest piece of better-than-expected data came from US private sector employers, who added 214,000 jobs in February, beating economists’ expectations. That added to strong manufacturing and construction spending data earlier this week.

"The questions people had regarding the strength of the economy, particularly the US economy, are clearing up and that’s helping to bolster a little bit more confidence in taking on some more risk," said Warren West, principal at Greentree Brokerage Services in Philadelphia.

The Dow Jones industrial average fell 6.06 points, or 0.04%, to 16,859.02, the S&P 500 lost 0.73 points, or 0.04%, to 1,977.62 and the Nasdaq Composite dropped 10.39 points, or 0.22%, to 4,679.21.

The FTSEuroFirst index was up 0.6%, on track for its fifth straight day of gains and at a one-month high.

MSCI’s broadest gauge of the world’s stock markets also rose to hit its highest level in close to two months.

Asian stocks rose overnight to a two-month high with Japan’s and China’s main indexes both up more than 4%.

Crude rebound

US crude rose to hit a two-month high above $35 per barrel despite government data showing crude inventories rose by 10.4-million barrels to 518-million in the week to February 26, almost triple the 3.6-million-barrel increase expected by analysts.

Brent crude futures were little changed at $36.79 a barrel.

US Treasury yields rose as the job market data reinforced the view that the Federal Reserve will raise interest rates later this year.

Benchmark 10-year Treasury notes were down 7/32 in price to yield 1.8581%. It earlier touched 1.87%, the highest since February 5.

The spectre of a Fed hike gave support to the dollar index, which measures the greenback against a basket of currencies. It rose 0.1%. The dollar was down 0.2% against the yen, at 113.75 yen, after gaining more than 1% on Tuesday.

Expectations that the European Central Bank (ECB) will announce an even more stimulative monetary policy at its March 10 meeting contributed to the euro’s weakness, although previous disappointment over lack of action limited the decline.

"The ECB is widely expected to weaken the euro with stronger stimulus," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. "At the same time, markets are mindful of that huge disappointment in December." The euro fell versus the dollar, dropping 0.3% to $1.083.

Reuters